Don’t be afraid of MLM, Part 4: Discerning the good from the bad
If you’re reading this, odds are you’re considering MLM as an option to earn some extra income, or to have an entirely new career. Guess what? You’re not alone. Recent statistics show there are over 15 million Americans in the MLM industry, generating nearly 30 billion dollars in revenue.
So you’re ready to get started, and now the question is: which MLM is worthwhile?
The following criteria need to be present in order for an MLM company to be a viable enterprise:
- The product/service fulfills a need. For a customer, the first thing to consider when buying is their level of need. And yes, another word for “need” is “want”. However, need is mandatory and want is discretionary. You will yield better financial returns in the long term with a needed product/service.
- What’s the cost? There is always a start up fee to join an MLM. A reasonable amount is under five hundred dollars, the reasoning being you are purchasing a license to sell, distribute and recruit for the company. Any other costs are incurred by you in the process of building your business. Another cost to be considered is your monthly expense for product, very often a mandatory requirement. This expense can be viewed as an incentive to make sales, but very often it’s the reason why people quit.One of the reasons I joined my company, SendOutCards, is because there is no mandatory monthly expense, thus I can develop my business at my own pace without feeling additional financial pressure. Even my website is free, not always the case with other MLMs.
- The company is corporeal. Can you find the company on a map? If the company does not have a physical location, their legitimacy is questionable. The company should be physically accessible, with real people who answer the phone if you call, and welcome you at the door if you go to their location.
- The company has a good track record. Do your homework: How long has the company been around? They should be in business for at least five years. A company in business that long most likely will be around for some time to come.Any negative buzz about the company on the Web? This is good to know, though not necessarily accurate due to the attrition factor (and therefore disgruntled participants) of MLM. Use your best judgement to sort it out.By law, company earnings statements are required to be publicly available. Read them.
- The compensation plan and administrative structure suit you. There are various compensation plans in MLM. Make sure that the commission rates, retail profits and bonus payments as well as the frequency of such payouts align with your financial goals, both short and long term.The company should handle administrative tasks such as maintaining the website, customer service and accounting. This allows all sales to be done online so you don’t have to chase people to get paid, and you can direct all problems/complaints to the company.
- The company possesses a strong philosophy of personal development. Personal development is a prerequisite to personal success. You can’t have one without the other. Part of your personal development will be exposure to books/audio/video that teaches both business and personal growth fundamentals, as well as a positive and optimistic ideology. A company that provides access to these tools as well as mentors to help you implement them sets itself apart in a very positive way.The company should do its part by offering a wealth of how-to support, but more importantly, have leaders who invest time and effort in developing personal relationships with their team. These leaders will not only teach you, but encourage and inspire you. In turn, you will do the same thing with your team. As an MLM entrepreneur, you’re in business for yourself, but you shouldn’t feel like you’re in business by yourself. Your success truly depends on a team effort.
These six items should be carefully considered when starting in MLM. Some of them are easily answered, others require a bit more scrutiny. If you have been approached to be recruited, please consider these criteria, as well as the honesty and integrity of the person who is presenting the opportunity.
Coming up in the final part: Philosophy and the future.